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Friday, May 22, 2009

Dish Networks Loses Satellite TV Subscribers but Grows Profits

Satellite TV provider Dish Network traded up more than 20 percent in Monday's trading on better than expected profits and the loss of fewer subscribers than analysts forecast. The stock had fallen by nearly half over the past year as the company loses customers to rival satellite TV company, DirecTV Group. Dish continued to lose subscribers, 94,000 this quarter, though fewer than the average analyst projection of 128,000. Despite this ongoing decline Dish beat analyst expectations with earnings of 70 cents per share, up from 58 cents per share in the year-earlier quarter. Revenue dropped 14 percent in the quarter.

dish networks installer van

Competition with DirecTV is sure to weigh on Dish through the recession because of its target demographic. Dish serves lower-end customers, which means they're more likely to give up their satellite TV service when times get tough. To remain viable and differentiate itself, Dish offered a $9.99 deal, but the company's CEO says that this incredibly low price doesn't fit with the company's long-term business strategy. I can see why Dish would need to add this price point to keep subscribers on the fence. But if it drops that price point, won't subscribers leave then?

There are a couple reasons Wall Street is happy with Dish. CEO Charles Ergen said on the earnings call that his business has stabilized after falling off a cliff last year. (This echoes the sentiments of the media giants about the ad markets). Ergen also reassured analysts that he is done moving around his executive team. There are also some strong signs the company is starting to manage piracy of its set-top box software, which has been a major problem. Many analysts thought Dish got a real boost from the end of analog TV, which forced many Americans to sign up for a new pay-TV service. But Ergen says this transition didn't have much of an impact on the company, so following quarters shouldn't suffer a drop-off.

Ergen is confident he will be able to turn around his company. A lot depends on how consumer confidence holds up. But one thing is for sure: the worse the economy, the more time people spend at home, watching TV.

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Sea Tel Cobham releases new antenna system

Sea Tel Cobham has released the DTV04 HD antenna system. The DTV04 HD is a three-axis marine stabilized antenna system that is compatible with DIRECTV's Ka-Band satellites. It can deliver three Ku-Band satellites (101W, 110W, and 119W) and 2 Ka-Band satellites (99W and 103W) simultaneously with one antenna system.

seatel dtv04 hd antenna system

The new system is built on Sea Tel's stabilized 04 series pedestal and features an auto skew function, which enables the system to move seamlessly from region to region and track constantly with no manual intervention.

Seal Tel says the system eliminates the need to for an additional Ka-Band antenna giving the user the ability to watch any authorized DIREC TV channel at any time on any satellite receiver eliminating the need for a master receiver. This is the first and only system in the marine market that has this capability, the company adds.

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AT&T slowly begins rollout of CruiseCast in-car satellite TV service

AT&T's entrance into the satellite radio/video market (dubbed AT&T CruiseCast) has soft-launched at select retail outlets, representing a delay from the company's original plans for a full launch in March, according to a report from TWICE.

Still despite the delay, the company is targeting a hard-launch date in early June, although no actual date has been set, said company president Winston Guillory. The service will provide 22 channels of live TV service and 20 channels of radio service direct to equipped vehicles via its satellite service. Orbitcast had a live demonstation of AT&T CruiseCast earlier this year - see the writeup and photos here.

at&t cruisecast van

AT&T is currently working with "small groups" of car audio specialists, expediters and distributors to sign up a few dozen customers to test its distribution, merchandising and promotional network, said Guillory.

Approximately 373 outlets have signed up to carry the product, according to TWICE, although many are not participating in the soft launch. Some retailers are taking an aggressive stance on the new offering, while others appear more cautious.

"We think it's a great technology - we wanted to take a position," said Al & Ed's Autosound product manager John Haynes. The retailer reportedly ordered 50 units about two weeks ago.

Crutchfield is taking preorders on its Web site, while others such as Car Toys and Abt Electronics are looking into selling the product. Gary Yacoubian, president and COO of MyerEmco, said AT&T CruiseCast "will create a ton of buzz," and the chain will be investigating it over the next few weeks.

Still, considering the current economic climate, the AT&T CruiseCast service is likely priced too high out of the range for most consumers.

lcd in the van

The AT&T CruiseCast device itself will retail at a suggested price of $1,299 and will come with a subscription price of $28 a month. Professional installation is required, and no free trials are planned at launch. "I am still collecting data, but preliminary feedback is that both the price of this unit along with the monthly cost of the limited programming will limit the number of potential customers that will be willing or able to justify this product in these very difficult financial times," Audio Express purchasing director Grant Phillips to TWICE.

Currently, the announced content partners for the service are MTV and NBC networks which includes programming such as MTV, Comedy Central, Nickelodeon, The N and Noggin. The 20 audio channels are provided by MusicChoice, Orbitcast has learned.

cruisecast antenna

This is hardly competition to Sirius XM Radio (yet). The AT&T CruiseCast service is less of a threat to "traditional" satellite radio right now - rather it's more of an alternative to the KVH DirecTV system, which is billed at nearly $3,000 and features a much larger antenna. Still, more competition is looming on the horizon.

Audiovox is planning on offering its FLO TV service provided by MediaFLO, at a target price of $599 - $699 (installed) through car dealers in late September or early October (read Orbitcast's coverage of the press event here). And don't forget ICO mim, the in-vehicle satellite service which could reach the market next year by suppliers including Kenwood.

But it's still too early to say whether in-vehicle live TV entertainment will ever grow out of a niche market.Right now Sirius Backseat TV is arguably the most reasonably priced live in-vehicle video service at $6.99/month, though it's a limited 3 channel offering. Backseat TV is also the first to market with live video installed at the OEM level, giving a slight leg up on the competition - but being first to market doesn't always mean being the market leader. It's still an extremely nascent market, and the jury's out on the long-term success.

So here's a question - if the price of in-vehicle video went down, would you consider it? Or is watching live TV in your car something you think you would never need? Sound off in the comments below.

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